FAQ About Being Sued By A Debt Collector In Alabama


What to Expect When You Are Being Sued — Questions and Answers Regarding Collection Lawsuits

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So you have been sued by a debt collector (debt buyer) — Asset Acceptance, LVNV Funding, Midland Funding, Portfolio Recovery, etc. and you have been served with the summons.  Or perhaps you are receiving letters from lawyers or non lawyers telling you that you are being sued — what do you do?

Our goal is to help you understand your rights under consumer protection and debt collection laws, so that you can take action now to increase your chances of being successful.

Bottom line is that it is possible to win the collection lawsuit filed against you, sometimes without hiring an attorney!

So never lose hope — instead know that you have excellent options.  Five options in fact when you have been sued.

Below are some frequently asked questions and answers about debt buyer lawsuits for your information.

For a free confidential consultation with an experienced lawyer about your situation and your options, call us at (205) 879-2447 or fill out our intake form on our Contact Us page.

Facts about Debt Buyers (Debt Collector)

Q. What is a debt buyer?

A. A debt buyer (also called a debt collector) is a company that claims to have bought a debt that you defaulted on and now it claims to own the debt.  This is critical — there is a big difference in owning a debt and claiming to own the debt.  If you get nothing else from this long article remember this — owning a debt and claiming to own a debt is not the same thing!

Q. Is it legal for a debt buyer to sue me?

A. Yes – if it owns the debt. We have not yet seen a situation where a debt buyer can actually prove it owns the debt. But assuming it truly owns the debt, it is proper for the debt buyer to sue you. (However, even if the debt buyer owns the debt, if it sues you after the statute of limitations has expired, the debt buyer has likely violated the law.)

Q.  Who are the lawfirms that normally file collection lawsuits against Alabama consumers?

A.  Zarzaur & Cunningham is the largest lawfirm but there is also Cloud & Willis, Holloway & Moxley, Ingram and Associates, Nadler & Associates, Nathan & Nathan, Parnell & Crum, and others.

What to Do If You Are Being Sued – Answering the Debt Collector Lawsuit

Q. Do I have to answer the lawsuit or can I ignore it?

A. If you ignore the lawsuit, the judge will most likely enter a default judgment against you in favor of the debt buyer.

Q. What is a default judgment?

A. A default judgment is where the judge rules that you owe the debt buyer everything the debt buyer claims against you.

Q. Why is a default judgment a bad thing?

A. It is bad for several reasons. A judgment can appear on your credit report for many years. Bank accounts can be garnished. Your wages can be garnished. If you own personal property or real estate, it can sometimes be sold at a “sheriff’s sale” to pay off all or part of the judgment.

Q. How do I avoid a default judgment?

A. Answer the complaint in the time allowed by law! In small claims and district court, you have 14 days from when you are served. In circuit court, you have 30 days from when you are served.

Q. I understand I should file an answer if I am being sued. How do I do that?

A. You can use the form that came with the lawsuit or contact us and we can send you a blank answer sheet that you can fill out after we have discussed your options. You must file it with the clerk of the court and send a copy to the lawyer representing the debt buyer.

Q. I understand how to file the answer. What do I say in my answer?

A. We would have to talk with you about your own unique situation before we could answer this question. Typically, we point out that the debt buyer does not own the debt and our client does not owe the debt buyer. Also, if it is applicable, we normally put that the statute of limitations has expiredWe do not recommend answering “I don’t have a job or any money” and we don’t recommend filing a counterclaim except in special circumstances.

The Collection Trial – What to Expect in Court

Q. After I file my answer, what happens next?

A. The court will normally set the case for trial. This may be in a month or six months depending on the court’s schedule. You should be notified by a letter or card from the court. If you don’t receive anything, it is a good idea to call the court (clerk’s office) and find out if your case has been set for trial.  (We do have a comprehensive video and transcript covering what happens from start to finish in a small claims or district court collection lawsuit here).

Q. What happens if I miss my court date?

A. Normally, the judge will enter a default judgment against you – just the same as if you never answered the complaint.

Q. What happens at trial?

A. The debt buyer is the plaintiff and must prove its case against you. The debt buyer will call any witnesses it has and try to introduce as evidence any documents it has to prove you owe the debt to the debt buyer. You can then show any evidence you have.

Q. What if I know I owe the original creditor – such as Discover Card, Bank of America, etc.?

A. The debt buyer has to prove that it owns the debt. We have seen times when two debt buyers claim to own the same debt! This is why a debt buyer must prove it actually owns the debt. You may admittedly owe money to the original creditor but you don’t owe money to the debt buyer unless it proves in its lawsuit against you that it truly owns the debt that you owed to the original creditor. We have not yet seen this happen.

Q. If I hire you, do I have to show up for the trial?

A. Each case is different but we normally don’t need you to be at the trial because you can’t testify to whether the debt buyer owns the debt.  If there are things you can testify to that will help your case we may want you to be at the trial.  Also if you receive a subpoena from the company that sued you, then you need to show up.

Q. How do I know if I won or lost?

A. You win if the court dismisses the case with prejudice. You also win if the court enters a judgment in your favor. We do not consider it a win if the court dismisses the case without prejudice as you could be sued again on the same debt.

If You Win the Collection Case – What Happens Next?

Q. Can the debt buyer file an appeal?

A. In small claims or district court, the debt buyer can file an appeal and start the trial over in circuit court. This can happen but is fairly rare in our experience.

Q. If I win at trial, will the debt buyer’s account on my credit report be removed?

A. Maybe. It should be removed from your credit reports as winning the case (dismissal with prejudice or judgment for you as the defendant) means that you do not owe the money to the debt buyer. So, the debt buyer should automatically remove the account from your credit reports. This rarely happens. So to make sure it happens, we often sue the debt collector.

Q.  If I win, can I ever sue the debt buyer for filing the lawsuit against me?

A.  Normally yes.  If the debt buyer sued you after it knew, or should have known, that the statute of limitations had expired, then yes you can often sue.  If the debt buyer committed false credit reporting, then you can often sue.  If the debt buyer filed what is known as a “shakedown” lawsuit — a lawsuit with no proof and no intent to prove — a lawsuit designed just to extort money from you — then we quite often sue the debt buyers.  So here is the bottom line — if you win your suit (the case is dismissed with prejudice or you win at trial) then you may have some options and you should find out your legal rights so you can take the right action.

Lawyer Fees

Q. How much will it cost to talk to you?

A. Nothing. We don’t charge for initially talking with you on the phone or meeting with you in person to help you understand your options.

Q. What do you charge to represent me at the trial?

A. It depends, but in most cases, we can represent you for a flat fee.

 

If You Are Being Sued and Want to Take Action – Call Us

Q. I want to discuss my case with you. What do I do?

A. It’s simple. Call us at 205-879-2447 or you can also fill out our intake form on our Contact Us page.

Contact us today for a free confidential consultation, as every day that passes may be the final day that you can take action and protect yourself. We can help ensure you are in a position to get what may be false information off your credit report and have recourse if a debt buyer violates consumer protection or debt collection laws.

John G. Watts


15 Comments

  1. […] Remember that the defendants LVNV and the Budzik lawfirm will deny the allegations in this lawsuit.  It is our burden to prove what we have alleged — just like it is the burden of LVNV when it sues Alabama consumers to show that the consumers owe a debt to LVNV. […]

  2. michael morell says:

    Can you recommend an office like yours in Arizona? Thank you.

  3. Bradford says:

    John Watts is a man I trust whole heartedly with any decisions or advice regarding my safety & protection as a consumer.

    John empowers me to be confident that as a consumer there are many rights and actions available to me. Making the decision to acknowledge these rights are responsibilities that we, as consumers, must be accountable for.

    It is a rare circumstance these days to find an individual like John Watts – his intent is genuine advocacy & consumer awareness.

    I have personally seem this demonstrated through his stoic pursuits in litigation on my behalf.

    Thank you John (and Randi) for your continued hard work.

  4. JoAnn says:

    After the lawsuit is filed, can the debt buyer then have another attorney besides the one listed send you letters trying to collect?

    • JohnGWatts says:

      JoAnn,

      If it is a lawyer in the same firm that sued you, that’s fine, assuming the lawsuit is still going. (If you have won your lawsuit then you should not get any collection letters on the debt.)

      If it is a different lawyer, then it is still fine as long as you don’t have a new firm claiming you owe the debt to the second firm.

      If you can describe for me what has happened and I’ll be glad to do my best to answer your question.

      Thanks!

      John Watts
      Birmingham, Alabama

  5. Cindy says:

    Do you know of a lawfirm such as yours in Oklahoma?

    Thanks!

  6. Paul says:

    I am being sued by a firm in AL representing AMEX. It is in the court system, have not received a court date as of yet. The firm is wanting me to sign a consent judgement and at the same time by them 10% of the balance I owe and agree to a $200 a month payment. Not exactly sure how to approach this. Can you offer any advice?

    • John Watts says:

      Paul,

      Give us a call at 205-879-2447 and we can help you think through your options.

      I am NOT a fan of consent judgments. This is a real judgment against you if you agree to it. It means this can show up on your credit report as a judgment. http://www.alabamaconsumer.com/2014/02/why-did-the-collection-lawyer-send-me-a-consent-judgment-and-what-does-it-mean/

      It may be the best thing to settle with AMEX but usually you can do this without a consent judgment, even without a lawyer.

      Let’s talk — call us at 205-879-2447 and ask for Carolyn — she can set us up with a quick call to go over your options. Let her know we have been chatting on the website and she’ll get you in with me as soon as she can.

      Thanks for your comment and I look forward to talking with you.

      John Watts

  7. Francis says:

    Can you recommend an office like yours in Louisiana

    • John Watts says:

      Francis,

      I’m sorry I don’t know of anyone specifically but I’ll check around and email you privately.

      Thanks

      John

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